Jadestone Energy Inc. has completed its acquisition of the Montara oil project (“Montara”), offshore Australia.
Further to the Company’s previous announcements on July 16, 2018 and September 21, 2018, all conditions precedent to the sale and purchase agreement have been satisfied, and PTT Exploration and Production Public Company Limited (“PTTEP”) and Jadestone have completed the transaction, including payment of the purchase price, as outlined below. With completion, PTTEP has transferred a 100% legal and beneficial interest in the Montara assets and a 99% legal and 100% beneficial right, title, and interest in the associated production licences AC/L7 and AC/L8 (the “Montara Titles”).
The remaining 1% legal interest in the Montara Titles will be held on trust by PTTEP, in favour of the Company, until Australian regulatory approvals relating to the transfer of operatorship of the Montara assets from PTTEP to the Company, are obtained from The National Offshore Petroleum Safety and Environmental Management Authority.
The Company has entered into an Operator and Transitional Services Agreement with PTTEP which will govern the operation and management of the Montara assets and the provision of transitional services in the period from completion until the transfer of operatorship.
Paul Blakeley, President and CEO commented:
“I’m delighted to have completed the Montara acquisition in just two-and-a-half months after announcing the deal. This reflects our deep in-region commercial expertise, nimble approach to decision-making and close working relationship with PTTEP. Today’s news is an excellent example of how we can deploy our unique skill-set to deliver material value for our shareholders through growth in the opportunity-rich Asia Pacific region.
“I’m also pleased with the purchase price we have paid for Montara, which allows us the opportunity to add significant value by reducing costs and adding reserves through further activity. The acquisition is highly accretive from day one, with metrics further enhanced by the cash coming with the asset as a result of the effective date of the transaction being January 1, 2018.”
Upon completion, Jadestone paid to PTTEP the purchase price of US$195 million and certain customary closing adjustments.
In addition to acquiring the Montara assets, upon completion, cash and inventory totalling US$92 million was transferred to Jadestone as a result of the accumulated economic benefits of the Montara assets for the period from the effective date of January 1, 2018 to completion
In connection with the acquisition, Jadestone has now fully drawn its US$120 million senior secured RBL debt facility provided by Commonwealth Bank of Australia and Société Générale. Funds from the debt facility part-funded the acquisition, in addition to fulfilling requirements for a debt service reserve account and providing for working capital requirements as well as certain fees and expenses.
Additionally, Jadestone has initiated a capped swap oil hedging programme designed to mitigate the potential impact of lower oil prices on its ability to service debt and ensure liquidity. The Company retains the ability to fully participate in price upside beyond US$80/bbl for the great majority of its hedged barrels.
